Stock-based CEO compensation and earnings manipulation

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dc.contributorAalto Universityen
dc.contributorAalto-yliopistofi
dc.contributor.advisorTervio, Marko
dc.contributor.authorBacha, Darman
dc.contributor.departmentTaloustieteen laitosfi
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2024-01-28T17:13:23Z
dc.date.available2024-01-28T17:13:23Z
dc.date.issued2023
dc.description.abstractIn this paper, I survey the existing literature on executive pay to study the effects of stock-based CEO compensation on earnings manipulation. I review a principal-agent model as well as a dynamic rational expectations model. The former frames the relationship between CEOs and shareholders, and the latter predicts strategic information disclosure, earnings manipulation, and shareholder misinformation resulting from stock-based CEO compensation. I then compare these theoretical insights with the latest evidence. Although empirical studies generally support the prediction that stock-based CEO compensation incentivizes earnings manipulation, there is no consensus on the specific mechanisms of the effect.en
dc.format.extent25 + 9
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/126263
dc.identifier.urnURN:NBN:fi:aalto-202401281931
dc.language.isoenen
dc.programmeBachelor’s programme in Economicsen
dc.subject.keywordCEO compensationen
dc.subject.keywordearnings manipulationen
dc.subject.keywordprincipal-agent problemen
dc.subject.keywordincentive payen
dc.titleStock-based CEO compensation and earnings manipulationen
dc.typeG1 Kandidaatintyöfi
dc.type.ontasotBachelor's thesisen
dc.type.ontasotKandidaatintyöfi

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